Industry NewsWashington DispatchHotels Seek Patent Reform

Hotels Seek Patent Reform

Last month, the American Hotel and Lodging Association was one of 50 organizations that signed a letter to Congress requesting reform for patent abuse. According to Kevin Maher, senior vice president of governmental affairs for AH&LA, patent trolls are no longer focusing solely on the tech industry and have moved on to targeting other businesses, including hotels.

“Patent litigation has been going on for a long time,” says Maher, “but there has been a trend over the last few years where these firms are buying up patents, and they’re using the patents not to develop a particular product, but to file lawsuits against businesses that they claim have violated these patents.”

The hotel industry has been targeted for out-of-the-box solutions and commonplace practices such as providing Wi-Fi to guests, developing online shopping carts, and offering wireless check-in and check-out procedures. In most cases, patent assertion entities target individual hotels and ask for monetary settlements of anywhere from $5,000 and $10,000. In some instances, the companies also demand royalty fees for continued use of a particular service.

Last year, patent trolls sued over 7,000 defendants and sent thousands more threat letters. This activity cost the U.S. economy $80 billion in 2011, and companies made $29 billion in direct payouts. Maher explains that hotels are forced to waste time and resources fighting these lawsuits.

“We’re trying to demonstrate the broad impact of this issue,” says Maher. “There’s some education that needs to be done because some members of Congress just think about this on the technology side. We’re letting them know that this has expanded to other businesses.”

If patent trolls continue to target the hotel industry, technological progress could stall, as more hoteliers will be hesitant about implementing new products or services that may result in patent litigation in the future.

The letter addressed to Congress was signed by organizations such as the American Banking Association, the American Hospital Association, the International Franchisers Association, and the National Retail Federation to name a few. To continue urging reform, the AH&LA is setting up one-on-one meetings with Congress to address this issue, and is committed to working with the Administration to make changes to how patents are issued and enforced by the U.S. Patent and Trademark Office.

“We’re not trying to impede patents or creativity,” says Maher. “But we need to do this in a way that can be reasonably enforced and encouraged.”